Scottish labour leader Iain Gray came as close as he could to admitting that his party’s record in government since devolution might have contributed to the “flat-lining” in Scottish pupils’ performance.

Mr Gray has taken the unusual step of asking for a meeting with academics whose high-profile report last week suggested that the achievements of Scottish pupils had fallen behind their counterparts in England, Wales and Northern Ireland, despite higher spending on education in Scotland.

The researchers say the key to improving attainment lies in improving the quality of teachers - and perhaps even paying them by results. The report urges the teaching unions and political parties to abandon their “obsession” with class sizes and pay more attention to the evidence of what works (see panels).

The report from the Centre for Public Policy for Regions, a think tank run by Glasgow and Strathclyde universities, found huge variations in spending. The most marked was between Northern Ireland and Scotland - respectively, pound;2,544 per primary pupil and pound;3,923 per secondary pupil, compared with pound;4,638 and pound;6,326. The authors, led by former Labour ministerial adviser John McLaren, described these differences as “scarcely credible”.

Yet, although Scottish spending on education is the highest in the UK, pupils’ achievements have not reflected that. The proportion in the last year of compulsory education gaining five or more GCSEs at grades A-C, or their Standard grade equivalent, between 1998-99 and 2006-07, has dropped by 0.3 per cent in Scotland: the rest of the UK has shown significant increases, up by 14.1 per cent in England, 8.5 per cent in Northern Ireland and 6.7 per cent in Wales.

Although the Scottish Labour Party has concentrated to date on the SNP Government’s failings, Mr Gray has now struck an unexpected note. He commented: “It would be an unforgivable mistake to stick our heads in the sand and ignore this report. Something is not right and we will not be complacent about the future of our children.

“We all like to think that Scotland’s education system is the best in the world. If that is no longer the case, then we have to face up to it and do something about it.

“I fully understand that these reports refer to the whole 10 years of devolution, under Labour-led administrations as well as SNP. We must be prepared to break with the past and reassess our educational system if that is what is required.”

The report’s authors are at pains to stress that “great caution” should be taken in comparing the data between the different countries - leading Education Secretary Fiona Hyslop to comment that the conclusions had so many health warnings they should be “quarantined”.

But, while acknowledging that the reasons for Scotland’s educational performance are not entirely clear, the analysis goes on to find further inconsistencies between pupil expenditure and achievement - within Scotland itself (see table right). There is a “fair degree” of correlation, although also “intriguing comparisons”:

- Stirling has a very low spend on primary and secondary pupils, but good to average attainment;

- Aberdeen has a high spend per pupil, but below-average results;

- East Dunbartonshire and East Renfrewshire are the two top-performing councils, but spend around the Scottish average.

The research states that if the average spend in Scotland was the same as in England, it would save around pound;1,000 per pupil or pound;680 million. If Stirling was the yardstick, the saving would be roughly pound;500 per pupil or pound;340m.

The CPPR analysis follows findings from surveys showing Scottish pupils slipping down key league tables. The Trends in International Maths and Science Survey (Timss) revealed that England’s scores were significantly higher than Scotland’s and that the difference widened between the survey years of 1995 and 2007.

Ms Hyslop called those results “unacceptable failings in maths and science in Scotland’s schools” which confirmed the “urgent need to act”.

The CPPR report acknowledges that the higher costs of supplying services to a very sparsely populated country like Scotland, and the concentrated levels of deprivation, could explain some of the differences. Scotland has 65 people per sq km compared with 385 in England, for example, but the report suggests such factors cannot account for the large discrepancies in spending.

Other reasons might also explain cost differences. Scottish teachers are slightly better paid than those in England, but not by a large margin: pound;33,399 at the top of the main scale in Scotland against pound;30,842 in England (outside London). And pupil:teacher ratios are more generous in Scotland than in the rest of the UK: 17.1 in primary and 12.3 in secondary, compared with 22 and 16.6 in England.

WHAT WORKS AND WHAT DOESN’T: THE KEY PRIORITIES

- Emphasise teacher quality over teacher quantity;

- Ensure teachers have the best skills by (i) making entry more flexible and (ii) making the criteria for selection more rigorous;

- Strong leadership within schools;

- Continuing development of teachers’ skills;

Source: Education Today: the OECD Perspective, January 2009.

WHAT WORKS AND WHAT DOESN’T: TEACHER QUALITY

“The key to getting it right appears to lie in the quality of the teachers. Well-trained teachers with the right skills and back-up will produce the best results. This is what lies behind the success in Finland, Alberta, Singapore and so on. It is not the number of teachers but the skill of the teacher that results in success. In each of these places, teachers are not that plentiful, in terms of teaching to small classes, but are carefully selected into an attractive profession with good compensation .

“Performance differences within schools suggest that it is individual teachers, rather than individual schools, that are having a greater impact. The (significant correlation between poor performance and socio- economic background) suggests that schools and teachers are not having the impact we know that they can have in terms of raising the standard of those children who come to school with lower knowledge and skills levels.”

Source: Spending on School Education, CPPR, October 2009

WHAT WORKS AND WHAT DOESN’T: CLASS SIZE

“Smaller class sizes are not strongly correlated with higher attainment. For example, in the United States the three states with the largest reductions in their student to teacher ratios between 1995 and 2005 (Alaska, North Dakota and Rhode Island) all registered a decline in performance relative to the rest of the US.

“The principal reason could be associated with the concern of a number of researchers that the effects of class-size reduction are offset by the effects of teacher-quality reduction. Research suggests that while some benefits are achieved in the early years of education, these gains dwindle over time and are relatively expensive to achieve.”

Source: Spending on School Education, CPPR, October 2009.